Gold & Silver Daily

¤ Yesterday In Gold & Silver

It was another day where gold rallied in Far East trading until 1 p.m. Hong Kong time---and then then the not-for-profit sellers showed up, with an interim low coming at the 10:30 a.m. GMT morning gold fix in London.  It rallied a bit from there---and really took off to the upside the moment the London p.m. gold fix was done for the day.  That rally got hammered flat---and "da boyz" set the low price tick at the 1:30 p.m. COMEX close.  The gold price rallied a bit into the close of electronic trading.

The high and low on Thursday were reported as $1,208.90 and $1,195.80 in the April contract.

Gold finished the Thursday session at $1,198.00 spot, down another $2.30 from Wednesday's close.  Volume, net of roll-over out of the April contract, was pretty light at only 104,000 contracts.

The silver price pattern was virtually the same as gold's, so I'll spare you the play-by-play on that precious metal.

The high and low ticks, which are barely worth the effort of looking up, were recorded by the CME Group as $16.355 and $16.14 in the May contract.

Silver was closed in New York yesterday at $16.20 spot, down another 1.5 cents.  Net volume was very quiet once again at only 20,500 contracts.

The platinum price followed an almost identical path to gold and silver as well---and it finished the Thursday trading session at $1,176 spot, down 4 bucks from Wednesday.

Ditto for palladium, expect the price got hit for a full percent at 10:40 a.m. EST, the precise same time as the other three precious metals got it in the ear from the HFT traders and their algorithms.  Palladium recovered most of its loses---and only closed down a buck at $823 spot.

The dollar index finished the Wednesday trading session at 95.91---and began to head higher as soon as trading began in the Far East on their Thursday morning.  There was an interim top at 96.25 around 2:30 p.m. Hong Kong time---and it traded flat until shortly after 12 o'clock noon in London.  It then it rolled over hard, cutting through the 96.00 price mark like the proverbial hot knife through soft butter.  But, once again, 'gentle hands' were at the ready.  The subsequent rally topped out at around the 96.55 mark at precisely 12:00 o'clock noon in New York.  From there it faded into the close.  The dollar index finished the Thursday session at 96.35---up another 44 basis points.

The gold stocks opened around unchanged, but with a positive bias---and really took off in the rally that began at the London p.m gold fix.  The high tick for the shares came at the same time as the high tick in the gold price---and from there they sank back to unchanged---and chopped sideways into the close.  The HUI finished down 0.09 percent.

The silver equities followed a similar pattern to the gold shares, but the price action was much weaker, as Nick Laird's Intraday Silver Sentiment Index closed down another 1.26 percent.

The CME Daily Delivery Report showed that 4 gold and 8 silver contracts were posted for delivery within the COMEX-approved depositories on Monday.  In silver, Jefferies issued 7 contracts---and once again JPMorgan was the big long/stopper with 6 contracts in its in-house [proprietary] trading account. The link to yesterday's Issuers and Stoppers Report is here.

The CME Preliminary Report for the Thursday trading session showed that for the second day in a row that March open interest in gold remained unchanged at 153 contracts.  March o.i. in silver declined 41 contracts to 956 contracts.

There were no reported changes in GLD yesterday, but an authorized participant added 1,339,489 troy ounces to SLV.  I would guess that this deposit was used to cover an existing short position---and if that was the case, it can be assumed that it would be JPMorgan doing the honours.

Joshua Gibbons, the "Guru of the SLV Bar List," updated his website with the weekly data from the Internet site---and this is what he had to say:  "Analysis of the 04 March 2015 bar list, and comparison to the previous week's list -- 258,026.4 troy ounces were added (all to Brinks London), no bars were removed or had serial number changes."

"The bars added were from: Kazinc (0.1M oz), Solar Applied Materials (0.1M oz), and 6 others.
As of the time that the bar list was produced, it was overallocated 186.3oz.

"All daily changes are reflected on the bar list."

There was a tiny sales report from the U.S. Mint.  They  sold 1,500 troy ounces of gold eagles---and that was it.

There was no gold reported received at the COMEX-approved depositories on Wednesday, but a chunky 121,143 troy ounces were shipped out, with most of it coming out of Scotiabank's vault.  The link to that activity is here.

It was another very decent day in silver, as 605,830 troy ounces were received---and 562,707 troy ounces were shipped out the door.  The 'in' volume was at Scotiabank---and the 'out' volume was at HSBC USA.  The link to that action is here.

Here's a chart that Nick sent my way last night---and I thought it worth sharing.  It shows the amount of gold held in foreign and international accounts by the U.S. Fed since 2000.

Then just after midnight EST Nick slid the chart posted below into my in-box.  It shows the withdrawals from the Shanghai Gold Exchange for the week ending February 27.  Nick said that the 37.917 tonne withdrawal that was reported was "comprised of two days before the Golden Week---and three days after."

I have a lot of stories for you today---and because of that, I'll happily leave the final edit up to you.


¤ Critical Reads

2015 February Job Cut Report: 50,579 Cuts, 38% of All Cuts in 2015 Due To Oil Prices | Challenger, Gray & Christmas, Inc.

Planned job cuts declined slightly in February, as US-based employers announced workforce reductions totaling 50,579, five percent fewer than the 53,041 in January, according to the report on monthly job cuts released Thursday by global outplacement consultancy Challenger, Gray & Christmas, Inc.

The February total was up 21 percent from a year ago, when employers announced 41,835 job cuts during the month. This marks the third consecutive monthly job-cut total that exceeded the comparable year-ago figure.

Employers announced 103,620 planned layoffs through the first two months of 2015, which is up 19 percent from the 86,942 job cuts recorded during the same period in 2014.

Once again, the energy sector saw the heaviest job cutting in February, with these firms announcing 16,339 job cuts, due primarily to oil prices.

This news item was posted on the Internet site yesterday---and I thank Dan Lazicki for today's first story.  The Zero Hedge spin on this is headlined "Initial Jobless Claims Surge to 10 Month Highs, Worst Start to a Year Since 2009"---and it's also courtesy of Dan.


We Tried to Re-Create JPMorgan’s Mutual Fund Returns and Gave Up

Last month at JPMorgan Chase’s 2015 investor day—where executives discuss results for the previous year in front of analysts and shareholders—the bank displayed impressive numbers for the performance of its mutual funds. Pie charts in the asset management unit’s presentation showed the percentage of money invested in funds that ranked in the top half of their categories: In fixed-income funds with 10-year records, the figure was 85 percent; for stock funds with 10-year records, it was 83 percent.

The presentation included a five-and-a-half-page appendix discussing sources and methods. While the notes on mutual fund and alternative asset performance include statements such as “the analysis excludes Brazil and India domiciled funds”—without saying why—they do not provide full details of how the calculations were done. Even so, that marked a big change from the previous year’s presentation, where similarly impressive numbers were displayed with a 30-word source line citing Lipper, Morningstar, and Nomura—and nothing else. “What the heck were they thinking with the 2013 report?” asks Anita Krug, associate dean at the University of Washington School of Law in Seattle.

The two approaches—no explanation a year ago and long notes this year—raise questions about how JPMorgan has come up with a set of numbers describing a key part of its business. The U.S. Securities and Exchange Commission says companies can’t mislead investors in public presentations. “Disclosures should be written so people without any particular financial background can understand them,” says Mercer Bullard, director of the University of Mississippi School of Law’s Business Law Institute and a former SEC official.

This Bloomberg article appeared on their website at 3:00 a.m. Denver time yesterday morning---and it's also courtesy of Dan Lazicki.


Buybacks at $46 Billion a Month Dwarf Everything in U.S. Market

The biggest source of fresh cash in American equities isn’t speculators or exchange-traded funds -- it’s companies buying their own stock, by a 6-to-1 margin.

Chief executive officers, who just announced the biggest round of monthly repurchases ever, executed about $550 billion of buybacks last year, according to data compiled by S&P Dow Jones Indices. That compares with a net $85 billion of deposits by customers of mutual and exchange-traded funds, the biggest gap since 2012, data compiled by Bloomberg and Investment Company Institute show.

If you sell a share of stock in the U.S. market, there’s a fair chance the buyer is the company that issued it -- and it’s buyers who’ve been on the right side of the trade since 2009.

Buybacks are helping prop up a bull market that is entering its seventh year just as investors bail out and head back to bonds.

I had a story about this a couple of days ago, but this one is better.  This Bloomberg item, filed from New York, appeared on their Internet site at 9:02 a.m. Denver time on Wednesday morning---and it's something I found in yesterday's edition of the King Report.  David Stockman gets in on the act with a far more comprehensive article on this issue headlined "February Stock Buybacks Hit Record—–Total $2 Trillion Since 2009"---and it's courtesy of South African reader B.V.


Marc Faber: Bubble Time on Wall Street, Same as It Ever Was

We all know that, from time to time, some sectors of the economy begin to expand rapidly and become an object of speculation (tulips, new territories such as the South Seas, the Mississippi concession, land, canals, railroads, mines, oil, new technologies and inventions, stamps, art, precious metals, etc.).

If monetary conditions are expansionary, it is likely that each boom will last longer and will be magnified, because entrepreneurs and speculators will borrow money in order to capitalise on the new profit opportunity.

There is basically nothing wrong with a boom driven by easy money, because, sooner or later, the supply will catch up with the demand and lead to declining prices (deflation), which will eliminate the weaker and less efficient suppliers (producers) and enlarge the market potential (demand) through lower prices.

This commentary by the good doctor appears on the Internet site yesterday---and it's the first offering of the day from Dan Lazicki.  It's worth reading.


Missteps, consolidation eroded New York Fed authority over banks

The New York Federal Reserve's once-unparalleled authority to oversee Wall Street has been weakened by a series of supervisory missteps and by a consolidation of power at the U.S. central bank's Washington headquarters.

Current and former New York Fed employees say its ability to independently regulate the country's largest banks began to deteriorate after the financial crisis, and got worse once U.S. Congress passed its landmark Dodd-Frank reform bill, prompting the Washington-based Federal Reserve Board of Governors to take a more active role.

The legislation sparked the creation of the Financial Stability Oversight Council, a U.S. Treasury unit of which Fed Chair Janet Yellen is a member, as well as the Large Institution Supervision Coordinating Committee, which oversees the biggest banks and is headed by Fed Governor Daniel Tarullo.

The Washington-based Fed board "felt the need to directly manage the process in a way that hadn't existed before," said a former New York Fed employee who requested anonymity. "Big regulatory issues are basically being handled in Washington, not in New York where all the big banks are, and so institutional expertise is being lost."

This Reuters article appeared on their Internet site at 12:53 p.m. EST yesterday afternoon---and it's courtesy of Washington state reader S.A.  The original headline read "Washington Strips New York Fed's Power".


Citigroup Lost $800 Million on Holding in Turkey’s Akbank

Citigroup Inc. is ending its investment in Akbank TAS, Turkey’s second-largest bank by market value, at a loss of $800 million on the value of its 2007 purchase.

The U.S.-based lender sold all of its remaining 9.9 percent holding in the Istanbul-based bank for $1.15 billion, it said in a statement on Thursday. The bank negotiated an early exit from a three-year lockup agreement it signed with Akbank’s main owner, Sabanci Holding, when it sold an almost equivalent stake for the same amount in 2012.

The sale will have no material financial impact because the bank recorded a pretax impairment charge of about $1.2 billion on the total investment in 2012, it said in a statement.

This Bloomberg news item, filed from Istanbul, put in an appearance on their Internet site at 4:37 a.m. MST on Thursday morning---and it's the first of two in a row from West Virginia reader Elliot Simon.


Largest U.S. Banks All Pass Latest Round of Fed 'Stress Tests'

All of the nation's 31 largest banks are adequately fortified to withstand a severe U.S. and global recession and keep lending, the Federal Reserve said Thursday.

Results of the Fed's annual "stress tests" show that as a group, the 31 banks are stronger than at any time since the 2008 financial crisis struck, thanks to a steadily recovering economy. The results build on positive outcomes from last year's stress tests.

Industry analysts say the most critical tests for the industry will come next week. That's when the Fed will announce whether it's approved each bank's request, if one has been made, to raise dividends or repurchase shares. Those results will be based on how each bank would fare in a severe recession if it took such steps.

"This week's tests are a more modest standard than what we will get next week," said Cayetano Carrasco-Gea, senior director at Moody's Analytics. "We will see a few banks fail next week."

You'll excuse me if I have a hard time swallowing this, dear reader.  This AP story, filed from New York, showed up on the Internet site at 6:32 p.m. EST on Thursday evening---and I thank Elliot Simon for his second contribution in a row.


New York City public schools to have Muslim holidays off

New York City public schools will now observe two Muslim holidays, officials announced Wednesday, making the district -- the nation's biggest -- one of the few to put Islamic holy days on its calendar.

Under the change announced by New York Mayor Bill de Blasio and city Schools Chancellor Carmen Farina, there will be no class for Eid al-Adha, also known as the Festival of Sacrifice, starting next September 24. Another Muslim holiday, Eid al-Fitr -- a festival marking the end of the holy month of Ramadan -- will become a holiday for those in summer school starting in 2016.

"This is a common-sense change," de Blasio said Wednesday, "and one that recognizes our growing Muslim community and honors its contributions to our city."

The decision affects some 1 million students in New York City. While it's not known exactly how many of them are Muslim, City Council Speaker Melissa Mark-Viverito said that almost 1 million of the more than 8 million people in the city's five boroughs practice Islam and a 2009 Columbia University study found that roughly 10% of New York City public school students are Muslim.

This CNN story showed up on their Internet site at 3:56 p.m. on Wednesday afternoon---and I thank Norman Willis for finding it for us.


The U.S. is Pumping Even More Oil and Storage Tanks Are Getting Filled to the Brim

The U.S. is pumping oil faster than at any time since 1972, and storage tanks are getting filled to the brim.

U.S. oil production rose for the fourth consecutive week, to a rate of 9.3 million barrels a day, even as oil-drilling rigs are being idled at an unprecedented rate. U.S. inventories also rose, for the eighth consecutive week, jumping 2.4 percent to 444 million barrels, the U.S. Energy Information Administration reported today. 

U.S. oil storage is bursting at the seams amid a global glut of supply that has driven prices down by half since last summer. U.S. inventories remain at their highest levels in at least 80 years, according to an analysis by Bloomberg Intelligence.

This short news item was posted on the Bloomberg website at 8:43 a.m. EST on Wednesday morning---and it's another news item I found embedded in yesterday's edition of the King Report.  There was another, but more in-depth story about this posted on the Internet site yesterday.  It's headlined "Cushing and Gulf Coast Storage Filling Up Fast"---and it's courtesy of Dan Lazicki.


ECB to begin €1 trillion stimulus next week

The European Central Bank will start buying government bonds from next week as it seeks to speed up the eurozone’s stalling economic recovery.

The Frankfurt-based bank on Thursday (5 March) announced it would purchase €60 billion of bonds per month, with the programme set to run until September 2016.

The decision to pump a total of €1.14 trillion into the eurozone economy was made in January.

Prices across the eurozone have now fallen for three consecutive months, raising the likelihood of a prolonged period of deflation.

ECB President Mario Draghi said the programme would remain until the bloc’s inflation rate is close to its 2 percent target rate.

This article appeared n the Internet site at 5:39 p.m. Europe time yesterday---and I thank Roy Stephens for sending it.  There was also a CNBC story on this as well, with three embedded videos of Mario Draghi making the announcement.  It's headlined "ECB ups growth forecasts; will start QE on March 9"---and it was sent to us by U.A.E. reader Laurent-Patrick Gally.


Mario Draghi Reveals Biggest. Hockey Stick---Ever!

Back in December when Mario Draghi revealed the latest ECB staff inflation forecast, when oil was already plunging, the ECB slashed its 2015 inflation forecast from 1.1% to 0.7%, while reducing the 2016 HICP inflation estimate modestly from 1.4% to 1.3%. Moments ago, during the ECB press conference, Draghi revealed the latest set of staff forecasts. They were, to put it mildly, bullish.

First, here is the GDP forecast:

  • 2015 GDP is now seen at 1.5%, vs 1.0% previously
  • 2016 GDP is now seen at 1.9% vs 1.5% previously
  • 2017 GDP - a new data point - is now seen at 2.1%

Good luck with all that, especially in a world in which China - the Eurozone's most important trading partner - is now openly warning that 2015 will be worse than 2014, and with a Grexit now lurking just around every corner, an outcome which would send Europe right back into a depression, there is zero chance the ECB hits these latest revised forecasts.

Yep, it's a Mario Draghi fairy tale for sure.  This Zero Hedge piece put in an appearance on their Internet site at 8:58 a.m. EST yesterday---and once again I thank Dan Lazicki for sending it our way.  It's definitely worth reading.


Global Bond Yields and Crude Tumble as EUR/USD Tests 1.10

EUR/USD rallied 100 pips into Draghi's press conference as weak shorts covered but the moment he opened his mouth), it collapsed and is now looking to break to a 1.09 handle for the first time since 2003. Despite hockey-stick-like expectations for E.U. growth, bond yields are compressing (as E.U. arbs the world) and oil prices are waking up to the reality that China took an ax to its growth expectations overnight. But apart from that, stocks are higher...

This tiny Zero Hedge article, along with three excellent charts, showed up on their website at 9:13 a.m. EST on Thursday morning---and I thank Dan Lazicki once again for sending it along.  It's worth the read.  I checked the precious metal charts just now---and the price smashes at 10:40 a.m. EST were unrelated to what happened when Draghi opened his mouth.  But the reaction to Draghi's speech certainly showed up in the U.S. dollar index two hours prior to that.


ECB launches €1.1 trillion blitz as bond market dries up

The European Central Bank is to launch a €1.1 trillion blitz of bond purchases from Monday to avert deflation and revive lending, finally joining the “QE club” a full six years after the Bank of England and the US Federal Reserve.

The belated move came as the ECB sharply raised its growth forecasts to 1.5pc this year and 1.9pc next year, leaving it unclear whether such massive stimulus is still needed or even advisable.

Year-on-year retail sales jumped 3.7pc in January as the delayed effects of falling energy prices feed through to household spending.

Mario Draghi, the ECB’s president, said the radical measures first unveiled by the central bank nine months ago had restored confidence and were starting to bear fruit, alleviating credit stress across every part of the eurozone.

Whistling past the graveyard, methinks, Mr. Draghi.  This Ambrose Evans-Pritchard offering appeared on the Internet site at 8:32 p.m. yesterday evening GMT---and Roy Stephens sent it to me just after midnight.


Ukraine's ex-finance minister arrested on fraud, embezzlement charges

Ukraine's former Finance Minister Yuri Kolobov, who is wanted in connection to alleged fraud and theft of millions in public funds, was arrested in Spain on Wednesday.

Ukrainian officials said Kolobov worked in conjunction with President Viktor Yanukovych, former Prime Minister Mykola Azarov and Georgy Dzekon, the former head of Ukrtelecom, a telecommunications company, to pilfer millions in public funds. Officials are now working to find the missing money. Yanukovich was forced out of power in 2014.

"We confirm the information that [Mr Kolobov] has been detained," the interior ministry said without giving any details on the circumstances of his arrest.

This UPI story, filed from Madrid, appeared on their website at 6:03 a.m. EST yesterday---and I thank Roy Stephens for bringing it to our attention.


Putin: East Ukraine situation difficult, at least cities not being destroyed

The situation in eastern Ukraine remains difficult, but at least cities are not being destroyed and civilians are not being killed, Russia's President Vladimir Putin said after meeting Italian Prime Minister Matteo Renzi.

Putin called on both sides of the Ukrainian conflict to“strictly comply” with the Minsk peace deal they signed on February 12.

I am sure that this is an opportunity for a comprehensive peace settlement and direct dialogue between Kiev, Donetsk and Lugansk," he said.

Describing the situation in southeastern Ukraine as “difficult,” the Russian President stressed that “at least, the fighting has stopped, the people are not being killed and cities are not being destroyed.

This article was posted on the Russia Today Internet site at 2:36 p.m. Moscow time on their Thursday afternoon, which was 6:36 a.m. in Washington.  I thank Roy Stephens for his second contribution in a row.


Libya declares force majeure on 11 oilfields due to insecurity

Libya has declared force majeure on 11 of its oilfields due to the deteriorating security situation after several oil installations and ports were targeted by attacks, the state-run National Oil Corporation said in a statement on its website on Wednesday.

Libya is caught up in a conflict between two rival governments, and several of its oil ports and oilfields have been hit in battles or taken over by Islamist militants profiting from the chaos as the United Nations tries to broker a peace deal.

The oil assets covered by the force majeure included Mabrouk and Bahi, which security officials said were overrun by Islamist militants earlier this week after security forces guarding the installations were forced to retreat.

Both of those oil operations were empty after staff were evacuated earlier. Mabrouk, which produced around 40,000 barrels per day before it closed, had been assaulted last month by Islamist militants claiming loyalty to Islamic State, an attack that killed at least 12 people.

This short Reuters article appeared on their website at 7:08 p.m. EST on Wednesday evening---and I thank International Man senior editor Nick Giambruno for passing it around yesterday.


Geopolitics most dangerous since WWII, Lord Rothschild warns investors

The world now faces greater geopolitical risks than since the end of the Second World War as unemployment threatens European welfare and chaos engulfs the Middle East, Lord Rothschild warned investors in the £2.3 billion RIT Capital fund.

World GDP grew at “a disappointing and uneven rate in 2014” following six years of monetary stimulus and extraordinarily low interest rates, the chairman of RIT Capital Partners, Lord Rothschild said in the investment trust’s 2014 annual report.

He also described stock market valuations at near an all-time high with equities benefiting from quantitative easing. The value of paper money has been debased as countries sought to compete and generate growth by lowering the value of their currencies, according to Rothschild. The euro and the yen depreciated by over 12 percent against the U.S. dollar during the course of the year and sterling by 5.9 percent. The unintended consequences of monetary experiments on such a scale are impossible to predict, the banker says.

This story was posted on the Russia Today website at 2:01 p.m. yesterday afternoon Moscow time---and I thank South African reader B.V. for sending it our way.


Koos Jansen: Chinese Gold Financing Deals Explained

One of the main causes many gold analysts assume Chinese gold demand (and withdrawals from the vaults of the Shanghai Gold Exchange) is inflated is because of Chinese Commodity Financing Deals (CCFD). However, this analysis is incorrect.

When I had discussion the other day with a colleague about how round tripping gold flows in China were completely separated from the Chinese domestic gold market and the SGE, I send him a link to a post I had written on round tripping that explains everything. When I clicked the link myself and read my post (from May 2014) I was of the opinion my writing skills have improved since I wrote it. Time to write a thorough new post on round tripping and other Chinese gold financing deals! Most likely I will rewrite more posts on the mechanics of the Chinese gold market.

Round Tripping

Most CCFD are ways for Chinese speculators to acquire cheap funds using commodities as collateral. When it comes to using gold as collateral for CCFD there are two options, round tripping and gold leasing. What is round tripping? Goldman Sachs wrote a report in which the process was properly explained. For this post we will not examine other commodities than gold.

Well, dear reader, this is way above my pay grade---and I won't even pretend that I understand what's in this commentary.  I also have no idea if what is said in this commentary is correct or not, so you're on your own with this one.  It was posted on the Singapore Internet site I thank Koos for sending it to me yesterday.


Does Rob McEwen really not wonder why gold isn't at $5,000 already?

If there's a tougher and shrewder entrepreneur and executive in the gold mining business than Rob McEwen, founder of Goldcorp and now CEO of McEwen Mining, GATA doesn't know of one. But McEwen's remarks this week at the PDAC conference in Toronto, at least as conveyed by the National Post, suggest that he's not tough and shrewd enough -- that in the crucial respect he's just like the rest of management in the gold-mining industry, unable to put 2 and 2 together even as the equation is flashing in neon lights right in front of him.

According to the National Post, whose report is appended in part below, McEwen is maintaining a prediction of a gold price of US$5,000 despite the monetary metal's poor performance in recent years.

Of course timing is everything and nothing else matters much, since over infinite time gold both may rise to many multiples of its current price, as well as fall to zero. But according to the National Post, McEwen told the conference that gold's time is or should be now, that gold is at a "turning point" because certain prices are going wild, like a condominium in New York that recently sold for $95 million and a painting that sold for almost $330 million.

"It sends a message," McEwen is quoted as saying, "that money is not that valuable anymore."

Indeed.  So if New York condos and mere paintings can rise in price to tens of millions of dollars, why hasn't gold followed along?

It's a great question---and I already know for a fact that Rob knows the answer.  More than 10 years ago, when I was just getting started with GATA, I spoke to Rob on the phone at length when he was CEO over at Goldcorp.  I explained the whole gold price management scheme to him---and he sent GATA a cheque for a $1,000.  This must read GATA release was posted on the Internet site yesterday.


Lawrence Williams: Gold recycling volumes very price-dependent – WGC

A new report from the World Gold Council (WGC) in conjunction with the Boston Consulting Group (BCG) takes a detailed look at gold recycling data over the past 20 years. Overall, the report finds, recycling has accounted for about one-third of the gold market supply, but that within this recycling volumes on a year to year basis have fluctuated considerably with a strong gold price correlation being largely responsible for the variations. A 30-year analysis of recycling data from 1982 to 2012 revealed that price fluctuations accounted for around 75% of the changes in recycling volumes and that economic shocks can boost recycling by up to 20%.

The report also notes a strong pattern of a shift in recycling volumes from West to East, which very much coincides with other factors seen in global gold demand.

Basically there are two types of gold recycling, the report notes. These are ‘High value recycled gold’, which accounts for roughly 90% of the total supply of recycled gold. This comprises recycled jewellery, gold bars and coins. The balance is ‘Industrial recycled gold’ which makes up the remaining almost 10% and consists primarily of gold found in waste electrical and electronic equipment. It notes that the growing volume in waste electrical and electronic equipment offers opportunities for industrial materials recycling, although obtaining gold from this material will become ever harder as smaller amounts of gold are used in them.

This commentary by Lawrie appeared on the Internet site at 3:17 p.m. GMT yesterday---and it's definitely worth readingIt should be noted that the version appears to have been edited---and the the commentary as Lawrie originally wrote it, appears on his website under the headlined "Gold recycling examined"---and the link to that is here.  I thank Dan Lazicki for pointing them out.


The Only Precious Metal You Should Own Right Now

You have a great shot at a brand new precious metals trade today.

It’s not gold. It’s not silver, either. And you can bet your sweet patootie it’s not copper. No, there’s only one metal worth buying right now…

I’m talking about palladium.

Palladium is the Rodney Dangerfield of precious metals – it just doesn’t get any respect, I tell ya. Some even call it the “forgotten precious metal” since gold and silver always steal the spotlight.

Palladium has certainly been trading in a world of its own lately, but not to be forgotten is the fact that the Commercial net short position in that metal by the Big 8 traders in the COMEX futures market is 108 days of world production---and they, and they alone, will determine the price, regardless of supply and demand---a point I made in a column earlier this week.  This commentary appeared on the Internet site on Thursday sometime---and it's the final offering of the day from Dan Lazicki, for which I thank him on you behalf.


Platinum prices poised for a rebound

Shrinking platinum stockpiles, growing demand from carmakers and new uses being trotted out in the energy field are stoking producers’ expectations that prices are poised to rebound from a five-year low.

Production of the shiny metal, used for jewelry and in catalytic converters in cars, will fall short of consumption this year by about 500,000 ounces, according to a January estimate by Credit Suisse Group AG. Given that, industry leaders are debating how long it will take for buyers to use up reserves and start paying more for a less available product.

Platinum is “in its strongest position” in a decade, said Chris Griffith, chief executive officer of Anglo American Platinum Ltd., the industry’s largest producer. “The fundamentals are that demand is increasing.”

What I said about palladium goes for platinum as well.  The same Big 8 COMEX traders are short 99 days of world platinum production---and none of these traders, which are mostly composed of big banks and investment houses, either produce or consume the stuff.  Like silver and gold, these banks are the 800-pound gorillas in the precious metal market---and until they decide otherwise, prices are going nowhere but down in the short term.  Supply and demand doesn't matter.  I found this story on the Internet site just before I hit the 'send' button on today's column.


Ted Butler: More Evidence of JP Morgan’s Manipulation Scheme In COMEX Silver

Ted Butler has written extensively about silver manipulation. He was the first analyst in this area to explain in great detail the mechanics of silver manipulation, but also to provide hard evidence on numerous occasions. In his latest update to his premium subscribers, he explains how JP Morgan is applying manipulative tricks in the March 2015 futures contract on COMEX silver.

This brief commentary by Ted is a compilation of all his quotes that I've posted in my column over the last three day, but here they are all in one spot.  And even if you're read it all before, it's certainly worth your while one more time.  It was posted on the Internet site yesterday---and I thank the proprietor, Taki Tsaklanos, for bringing it to my attention---and now to yours.


The Most Likely Stocks to Give You Vertical Profits

"This is a historical opportunity," says Pierre Lassonde, co-founder and chairman of gold royalty company Franco-Nevada. Right now, gold stocks are so beaten down and undervalued that they have nowhere to go but up. And once the gold market rallies again, the best of the best mining companies—those with proven management teams and high-grade ounces in the ground—will simply go vertical.

Find out how to prepare your portfolio to get a shot at the jackpot. In GOING VERTICAL, Casey Research's timely on-line event, on Tuesday, March 10, at 2 p.m. EST, eight of the world's top industry experts tell you everything you need to know—including some of their favorite stocks to own now.  Register here to watch—it's free.

[When, not if, JPMorgan et al are instructed to step aside and let precious metal prices run to the upside, VERTICAL PROFITS is what they will be, dear reader.  That day draws ever closer. -  Ed]



¤ The Funnies

Here are four more photos from Sedona and area.  The first is the interior of the Chapel of the Holy Cross---the photos of which adorned yesterday's column.  They're linked here, if you wish to refresh your memory.  The second and third photos are two more view shots taken from either side of the church.  When I [finally] make my millions in the precious metal market, I'm going to buy the house in the right foreground in photo #2 and use it as rental property.  The third photo was taken on the walkway up to the chapel.  Don't forget the 'click to enlarge' feature.

Pershing Gold is an emerging Nevada gold producer on a fast-track to re-open the Relief Canyon Mine, which includes three open-pit mines and a state-of-the-art, fully permitted and constructed heap-leach processing facility. Pershing Gold is currently permitted to resume mining at Relief Canyon under the existing Plan of Operations.

Pershing Gold's landholdings cover approximately 25,000 acres that include the Relief Canyon Mine asset and lands surrounding the mine in all directions. This land package provides Pershing Gold with the opportunity to expand the Relief Canyon Mine deposit and to explore and make new discoveries on nearby lands. The Company is currently listed on the OTCQB and has submitted an application to up-list to the NASDAQ stock exchange.

Click here to request more information or contact the company. ​


¤ The Wrap

And while I usually only comment on Silver Eagle sales in the weekly review, yesterday’s report from the U.S. Mint indicated a sharp jump in the daily sales rate this month above not only very recent daily selling rates, but even above estimated full daily production capacity. Whereas sales for February came to a bit less than 108,000 coins per day (7 day week), yesterday’s sales for the first few days of March come to 141,000 coins per day, above previous full capacity of 130,000 coins per day. My sense is that the big buyer held back a bit recently in order to give the Mint some breathing room production-wise and away from having to fully ration Silver Eagles, as has been the case many times over the past four years.

I can’t help but conclude that JPMorgan accounts for a large part of recent sales of Silver Eagles. I don’t hear of strong retail demand from my usual sources and sales of gold coins are so weak as to support the feedback of overall weak retail coin demand. Someone is a big buyer of Silver Eagles and if it’s not the public it has to be someone big. I say it’s the same big buyer of other forms of physical silver, including the delivery of COMEX March contracts. - Silver analyst Ted Butler: 04 March 2015

It was just another day off the calendar where prices rose a bit in early trading in the Far East---and then got sold down after that.  Any upward price movements are hammered flat before they get too far.  It's almost like price are being kept in some sort of holding pattern---but for what reason, and how long?

Today we get the job numbers at 8:30 a.m. EST---and I'll be interested to see what price 'action' we have at that point.  Last month there was very little.

Once again I have the 6-month charts for all four precious metals.

You'll note that JPMorgan et al have been taking tiny slices out of gold, silver and platinum every day this week.  These "salami slices" normally culminate in a huge engineered price decline.

And as I write this paragraph, the London open is twenty minutes away.  Gold and silver didn't do much of anything in morning trading in the Far East on their Friday, but both began to head lower around lunch time in Hong Kong, just as it has been happening all week---and both are down from yesterday's close in New York.  Platinum and palladium have been chopping sideways.  Net gold volume is a hair under 14,000 contracts---and silver's net volume is very quiet as well at 2,900 contracts.  The dollar index hasn't been doing much, but is currently up about 8 basis points.  Nothing to see here once again.

Today we get the latest Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday---and I, like Ted, am hoping for a slight improvement in the Commercial net short positions in both gold and silver.  But based on the reporting week, it's too close to call at the moment.

We also get the latest Bank Participation Report.  This is data extracted directly from the COT Report, which shows the COMEX futures contracts, both long and short, that are held by the U.S. and non-U.S. banks as of Tuesday's cut-off.  I'm expecting them [and the COT numbers] to be ugly once again---and it's for that reason I'm more than nervous about the price set-up at the moment.  I may have a better feel for it after the job numbers are released this morning.  If "da boyz" are going to do anything, that would be a perfect time.  However, both Ted and I have been waiting for the hammer to fall for a while now---but so far, nothing.  So we wait.

And as I send today's effort off into cyberspace at 5:15 p.m. EST, I see that the gold price is continuing to head south---and is down about five bucks at the moment.  I also note that the HFT boyz put the boots to silver at exactly 9 a.m. in London trading---and it's currently down two bits from Thursday's close.  Platinum and palladium are down four dollars each.  Gold volume is just under 26,000 contracts, which isn't overly heavy considering the price action.  Silver's net volume is a bit under 7,000 contracts---and that's a surprisingly low number as well. 
The almighty dollar index is now up 34 basis points.

Based on what I see in front of me at the moment, I look forward to the precious metal price "action" at 8:30 a.m. EST with some fear and trepidation although, as I say at times like this, I'd love to be spectacularly wrong.

That's all I have for today.  Don't forget to sign up for Casey Research's free webinar that's mentioned in the last Critical Read of the day---and to save you from scrolling up, the story is linked here.

Enjoy your weekend, or what's left of it if you live west of the International Date Line---and I'll see you here tomorrow.

Ed Steer